Investigation of species of the genus Cytospora, fungi belonging to the form class Deuteromycetes, resulted in the isolation of two novel antibiotic substances, and the demonstration that other members of the genus also produce antimicrobial activity when grown under the appropriate conditions. Since fungi are not generally considered to be excellent sources of antibiotics the discovery has resulted in an interdisciplinary program to study the morphology and physiology of these fungi as well as the chemistry of their metabolites. From a survey of approximately twenty representatives of this genus four organisms have been selected for further study on the basis of observed broad spectrum antibiotic activity in culture media and crude extracts. Studies to delineate the requisite conditions for optimal fungal growth and antibiotic production will be coupled with chemical studies on the isolation, characterization, and structure elucidation of active compounds. From these investigations new sources of useful therapeutic agents for the treatment of infectious diseases may be discovered.